Exhibit 11-5
the Table Below Gives Beverage Preferences for Random

question 12

Multiple Choice

Exhibit 11-5
The table below gives beverage preferences for random samples of teens and adults.
$\begin{array}{lrrr}&\text { Teens}&\text { Adults }&\text {Total }\\\text { Coffee } & 50 & 200 & 250 \\\text { Tea } & 100 & 150 & 250 \\\text { Soft Drink } & 200 & 200 & 400 \\\text { Other } & 50 & 50 & 100\\400&400&600&1,000\end{array}$ We are asked to test for independence between age i.e., adult and teen) and drink preferences.
-Refer to Exhibit 11-5. The test statistic for this test of independence is

• A) 0
• B) 8.4
• C) 62.5
• D) 82.5

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Definitions:

Stock Split

A corporate decision to fragment its current shares into additional shares to raise the market fluidity of the shares.

Clientele Effect

A theory suggesting that the types of investors attracted to a company depend on the company's dividend policy and related tax treatments.

Compromise Dividend Policy

A strategy that aims to balance between retaining earnings for reinvestment and paying dividends to shareholders.

Residual Dividend Approach

A policy for determining dividend payments whereby dividends are set as the earnings left over after funding the company's capital expenditure and working capital needs.